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Does Nampa vote spell trouble for the future of urban renewal projects?

Does Nampa vote spell trouble for the future of urban renewal projects?

Idaho Freedom Foundation staff
November 11, 2013
[post_thumbnail] Bruce Skaug, Nampa, was elected to the City Council Nov. 5, partially based on his contention that urban renewal spending has gone too far.

Urban renewal may be an unfamiliar term to some Idahoans. But as a mechanism for funding public policy agendas, it is found throughout the state, and it’s an idea that voters in Idaho’s second largest city appear to have rejected.

“It (urban renewal) sounded good when these projects first started,” commented Bruce Skaug, Nampa, who was elected to a City Council seat Nov 5. “It is hurting us now.”

Urban renewal districts are specific geographical areas that are singled out by city and county governments. Such districts encompass specific territory, and appointed board members are in turn given the authority to tax individuals and businesses within that territory.

Advocates of urban renewal districts view them as vehicles for economic development in blighted regions. Critics often view urban renewal districts as abusive mechanisms of “taxation without representation,” and distributors of “corporate welfare.”

Skaug believes that the creation of urban renewal districts in his city has been destructive, in that it has taken tax revenues away from necessary infrastructure projects and diverted them to projects of a lesser priority. “We can't pave our streets like we should because of urban renewal,” he told IdahoReporter.com. “We're not getting funds into our tax base, because those funds are going into other special urban renewal projects.”

Skaug noted that with urban renewal funding, a new library and police department building were created in Nampa. “I'm glad to have those things but I don't like the funding structures any more than the voters of Nampa do. When the urban renewal taxing district was first created we were told that it wouldn't cost us any money from our personal taxes.” He says that in the case of previously owned properties, “that’s sort of true.”

But tax revenues that are derived by new developments within an urban renewal district after the district is established all go to the urban renewal district itself and not to the city government. “We still have to fund the streets and the sewers and the new things around us,” Skaug said, yet the normal funding mechanism for such infrastructure items often doesn’t materialize.

In years prior, urban renewal districts in Idaho have not only possessed the power to levy taxes, but policing powers as well. In February of this year, Rep. Luke Malek, R-Couer d’Alene, noted that “currently, urban renewal districts have the power to enter into any private home or business to make an inspection,” and introduced legislation to eliminate that authority. The legislation passed in both the House and Senate, and was signed into law by Gov. Butch Otter in March.

Yet despite the elimination of police powers, urban renewal districts still control enormous sums of taxpayer money with the taxpayers themselves having very little say, if any, about how their money is handled. In Rupert, for example, city officials there are considering the creation of a new urban renewal district to help fund a new fruit processing plant operated by Frulact Corporation, a Portugal-based company.

Skaug is not the only Nampa resident who has taken a critical view of urban renewal projects. In Nampa’s election, voters there chose to unseat an incumbent mayor while electing three new City Council members, with much of the debate focused on reining in, and some cases reversing, urban renewal projects.

“Moving forward, infrastructure projects are the only kind of undertakings I’d consider using urban renewal for,” said Randy Haverfield, one of the newly elected council members in Nampa. “We need to get taxes down, not increase them. We need to get private enterprise growing in our city. Any further developments with urban renewal projects will need to come directly from a vote of the people.”

Skaug and Haverfield echo some of the same criticisms of urban renewal districts that others in the Legislature have stated. “The purpose of urban renewal was to remove blight,” noted Rep. Kathleen Sims, R-Coeur d’Alene, before a House committee earlier this year. “Nobody has ever found the blight that was supposed to be removed in my city, $40 million later.”

Yet other members of the Legislature believe that leaving the choice of urban renewal districts in the hands of local city and county policymakers is a good thing. “Under the law, local communities make their own urban renewal and economic development decisions and that is as it should be,” said Rep. Grant Burgoyne, D-Boise. “Urban renewal's critics claim that the law is somehow undemocratic. I do not agree. If Nampa city election results reflect voter discontent with the city's urban renewal actions, and different urban renewal decisions are now made, I would say that is proof that democracy is actually working.”

The Legislature is expected to consider further efforts to regulate urban renewal districts when it convenes in January.

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